No fine payments made in Manitowoc Ponzi scheme

MANITOWOC - The deadline for Manitowoc business owner James Nickels and accountant Gregory Anderson to pay fines incurred for their part in a $3.6 million Ponzi scheme has come and gone, with no payment in sight.

According to the order document from the Wisconsin Department of Financial Institutions, Nickels, Anderson and Fiscal Concierge were to resolve all fines and restitution payments by Jan. 8. However, according to George Altoff, DFI spokesperson, no payments have been made.

Altoff said the DFI still considers this an open case and may decide to pursue other options to get payments from the parties involved.

According to Nickels, he and Anderson are making arrangements to make the payments.

The final order from the DFI was served to Nickels, Anderson and Fiscal Concierge Dec. 9 after an investigation revealed Nickels had sold promissory notes totaling approximately $4 million to at least 35 investors and none of the notes had been registered with the Wisconsin Division of Securities, as is required by law.

The document outlined several laws that had been violated by the business and accused Nickels of selling promissory notes as a Ponzi scheme.

The document stated: “Division staff analysis of Fiscal Concierge’s bank records and business records show that the company has never been a profitable business at any time and that Nickels and Fiscal Concierge have never been able to make principal or interest payments to earlier investors without an infusion of additional money from another investor or investors.”

Nickels, uncle to Manitowoc Mayor Justin Nickels, said when he started Fiscal Concierge, his lawyers never advised him to register the security bonds he was selling to investors, so he was unaware that there could be any consequences from the state.

“We are now working on a plan to resolve these issues,” James Nickels said in December. “… These are wonderful people and I deeply regret what has happened.”

As of Dec. 9, at least 31 investors who held promissory notes issued by Fiscal Concierge had not received timely interest payments since May 2016. According to the DFI order, seven of the noteholders have died since 2007. One of those investors was James Nickel’s mother, Audrey, who died April 2015.

There are open lawsuits from the Estate of Audrey Nickels and two other estates of deceased investors suing James Nickels and Fiscal Concierge for the money he owes them from security bonds.

The DFI ordered James Nickels to pay $3.6 million in restitution to its investors in addition to the $50,000 in fines for violations committed against investors. The order also called for Fiscal Concierge to cease and desist any further offers or sales of securities until they qualify as covered securities or are registered per state statute.

Anderson, an accountant with Ihlenfeld, Skatrud & Anderson, Inc. in Manitowoc, was also named in the order for his role in performing accounting and tax preparation services for James Nickels and Fiscal Concierge.

The DFI stated that despite Anderson’s knowledge of the financial condition of Fiscal Concierge, he solicited at least 27 clients of Ihlenfeld, Skatrud & Anderson, Inc. to invest in promissory notes issued by Fiscal Concierge. For his involvement, Anderson was fined $25,000 by the DFI, none of which has been paid to date.